Samsung expects continued chip boom after record 2Q profit
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Samsung said a memory chip boom that propelled it to record profit in the second quarter is likely to continue in the third, just as revenue is widely expected to benefit from sales of OLED screens to Apple.
The world's biggest maker of memory chips, smartphones and TVs is set to smash its annual profit record after better-than-forecast performance in its mobile business lifted April-June profit slightly above its early-July guidance, analysts said.
"Looking ahead to the third quarter, the company expects favorable semiconductor conditions to continue," Samsung said in a statement on Thursday. "Although overall earnings may slightly decline quarter-on-quarter as earnings weaken for the display panel and mobile businesses."
Memory Chips 
Chips were Samsung's top earner in the three months through June, as it more than tripled from the same period a year earlier to a record eight trillion won (7.20 billion US dollars). Continued demand for DRAM and NAND chips and supply constraints are likely to sustain profit margins for the foreseeable future, Samsung said.
AP Photo

AP Photo

Companies are adding server memory capacity to expand new server platforms and cloud services and handle artificial intelligence and other emerging services. Hardware manufacturers will likely increase orders of memory chips for smartphones as they launch new models later this year. Consumers also expect their handsets to be packed with higher memory storage, which increases memory demand.
The unprecedented boom in the memory chip industry, dubbed the “memory super cycle,” helped push Samsung’s April-June net income to 10.8 trillion won (9.7 billion US dollars), up 85 percent from 5.8 trillion won a year earlier.
Weaker Mobile
In its mobile division, Asia's third most-valuable company by market value, reported 4.7 percent fall in profit, slightly milder than the decline forecast in early July.
AP Photo

AP Photo

Mobile chief Koh Dong-jin this month said cumulative sales of new flagship Galaxy S8 and S8+ smartphones, released April, were 15 percent higher than those of its predecessor.
However, the firm expects mobile earnings to dip in the third quarter as S8 sales trail off, mid- to low-tier models take up a larger share of total shipments, and marketing costs increase for the Galaxy Note 8, unveiled on Aug. 23 in New York.
Samsung store. /AP Photo

Samsung store. /AP Photo

OLED Screen
Apple is widely tipped to adopt Samsung's organic OLED display for the next iPhone expected in the second half of the year. Subsidiary Samsung Display has an over 90-percent market share in smartphone OLED screens.
However, price competition in LCD used in low- and mid-tier handsets is expected to cut margins.
Samsung's record earning come as the firm's Vice Chairman Jay Y. Lee is in detention while on trial for his alleged role in a corruption scandal involving South Korea's former president Park Geun-hye.
(Source: Reuters & AP)